State Oil Firms to Invest $400 Million in Ecuador Oil Block

Exploration in the 490,000-Acre Oil Concession to Start in January

QUITO—State-run oil companies from Ecuador, Chile and Belarus plan to invest about $400 million to explore and develop the 490,000-acre Block 28 oil concession in southeast Ecuador.

Ecuador's Petroamazonas will have a 51% stake in the project, while Sipetrol SA, a unit of Chile's state-owned Empresa Nacional de Petroleo, or Enap, will own 42% and Belarus's Belorusneft will have the remaining 7%.

About $30 million of the planned investment will come from Sipetrol and Belorusneft and will go into exploration. The companies plan to conduct exploration over a three-year period, and anticipate to produce oil from the block for over 15 years.

The remaining $370 million investment, which will be used for production, will come from the three state oil companies, with their share of investment based on their stakes in the project.

Petroamazonas General Manager
Oswaldo Madrid
said exploration work will begin in January 2015.

Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, produces an average 550,000 barrels of crude oil a day. About 80% of Ecuador's crude output comes from Petroamazonas and Rio Napo, a joint venture of Petroamazonas and Venezuelan state-owned Petroleos de Venezuela SA.

Petroamazonas is pursuing talks with other foreign state-owned companies to form partnerships to increase oil production in the Andean country.

Mr. Madrid says companies from Peru, Colombia, Angola, India, among other countries, have shown interest in developing projects in Ecuador, although the talks are at the preliminary stages.